(Bloomberg) -- Illinois Governor J.B. Pritzker is proposing a plan to fully fund the state’s pensions by 2048 as he seeks to bolster the finances of the worst-rated US state. 

The five state pension systems are less than 45% funded after decades of inadequate contributions. The retirement systems, which have about $142 billion of unfunded liabilities, are set to reach 90% funding by 2045 thanks to a 1994 law. Pritzker’s proposal would raise the funded ratio target to 100% and add three years to the payment schedule.

The plan was released Wednesday as part of the fiscal 2025 budget presentation. The state’s annual pension contributions would increase when other state debts are paid off. In fiscal year 2030, about $6 billion in debt taken in 2017 to pay down the state’s bill backlog will be retired. Three years later, $10 billion in pension funding bonds sold in 2003 will mature.

The governor wants “to dedicate half of the revenue being used to pay off the 2017 & 2003 bonds to make additional payments to the state’s pension systems when the debts are paid off,” according to budget documents. 

Pensions have long weighed on Illinois’ financial outlook. While the state has earned a series of credit ratings under Pritzker thanks to its improving finances, Illinois is still the lowest rated US state, largely because of its pension debt. Pritzker’s plan would save the state about $5.1 billion by fiscal 2045, according to the Pritzker administration.

The state has made progress to shore up the pensions but still falls behind peers. Average funding levels for public pensions stand above 70%, while Illinois’ five systems have less than half of what’s needed to pay retirees over the long term.

“Nearly all other states and pension actuaries set a target of 100 percent,” according to budget documents. “Credit rating agencies and bond investors have consistently pointed to Illinois’ 90 percent target as inadequate.”

In the fiscal year starting July 1, Illinois is set to contribute $10.1 billion to pensions as part of an overall general funds budget of nearly $52.7 billion, according to Pritzker’s spending proposal.

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